A Firm Only Has Current Assets and Fixed Assets

question 69

Multiple Choice

A firm only has current assets and fixed assets. Its current assets are $100,000 and total assets are $300,000. The firm's sales are $900,000. The firm's fixed asset turnover is

• A) 4.5x.
• B) 12.0x.
• C) 2.4x.
• D) 5.0x.

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Definitions:

Productivity

An indicator of production effectiveness typically expressed as the proportion of products generated to the resources used in creating them.

Output

The amount of goods or services produced by a company, industry, or economy within a particular period.

Input

Inputs like workforce, raw materials, and financial assets employed in the process of manufacturing products or delivering services.

Factor Substitution Effect

The change in the use of factors of production, like labor and capital, resulting from changes in relative prices or technological advancements.